Global Corporation Income Statement Year ended December 31 (in $ millions) Net sales Cost of sales Gross Profit Selling, general, and administrative expenses Research and development Depreciation and amortization 2023 2022 186.7 176.1 - 153.0 - 147.3 33.7 - 13.5 28.8 - 13.0 - 8.2 -7.6 -1.2 -1.1 10.8 7.1 Operating Income Other income Earnings Before Interest and Taxes (EBIT) Interest income (expense) Pretax Income 10.8 7.1 1 - 7.7 -4.6 3.1 2.5 Taxes -0.8 -0.6 Net Income 2.3 1.9 Earnings per share: $0.64 $0.53 Diluted earnings per share: $0.61 $0.50 Suppose that in 2023, Global launched an aggressive marketing campaign that boosted 2023 sales further by 15.8%. However, their operating margin fell from 5.76% to 3.98%. Suppose that they had no other income, interest expenses were unchanged, and taxes were the same percentage of pretax income (26%) as in 2022. Global Corp. initially projected the 2023 income statement shown in the following table: a. What was Global's EBIT in 2023? b. What was Global's net income in 2023? c. If Global's P/E ratio (18.0) and number of shares outstanding (3.6 million) remained unchanged, what was Global's share price in 2023?
Global Corporation Income Statement Year ended December 31 (in $ millions) Net sales Cost of sales Gross Profit Selling, general, and administrative expenses Research and development Depreciation and amortization 2023 2022 186.7 176.1 - 153.0 - 147.3 33.7 - 13.5 28.8 - 13.0 - 8.2 -7.6 -1.2 -1.1 10.8 7.1 Operating Income Other income Earnings Before Interest and Taxes (EBIT) Interest income (expense) Pretax Income 10.8 7.1 1 - 7.7 -4.6 3.1 2.5 Taxes -0.8 -0.6 Net Income 2.3 1.9 Earnings per share: $0.64 $0.53 Diluted earnings per share: $0.61 $0.50 Suppose that in 2023, Global launched an aggressive marketing campaign that boosted 2023 sales further by 15.8%. However, their operating margin fell from 5.76% to 3.98%. Suppose that they had no other income, interest expenses were unchanged, and taxes were the same percentage of pretax income (26%) as in 2022. Global Corp. initially projected the 2023 income statement shown in the following table: a. What was Global's EBIT in 2023? b. What was Global's net income in 2023? c. If Global's P/E ratio (18.0) and number of shares outstanding (3.6 million) remained unchanged, what was Global's share price in 2023?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Global Corporation
Income Statement
Year ended December 31 (in $ millions)
Net sales
Cost of sales
Gross Profit
Selling, general, and administrative expenses
Research and development
Depreciation and amortization
2023
2022
186.7
176.1
- 153.0
- 147.3
33.7
- 13.5
28.8
- 13.0
- 8.2
-7.6
-1.2
-1.1
10.8
7.1
Operating Income
Other income
Earnings Before Interest and Taxes (EBIT)
Interest income (expense)
Pretax Income
10.8
7.1
1
- 7.7
-4.6
3.1
2.5
Taxes
-0.8
-0.6
Net Income
2.3
1.9
Earnings per share:
$0.64
$0.53
Diluted earnings per share:
$0.61
$0.50
Transcribed Image Text:Suppose that in 2023,
Global launched an aggressive marketing campaign that boosted 2023 sales further by 15.8%. However, their operating
margin fell from 5.76% to 3.98%. Suppose that they had no other income, interest expenses were unchanged, and taxes
were the same percentage of pretax income (26%) as in 2022.
Global Corp. initially projected the 2023 income statement shown in the following table:
a. What was Global's EBIT in 2023?
b. What was Global's net income in 2023?
c. If Global's P/E ratio (18.0) and number of shares outstanding (3.6 million) remained unchanged, what was Global's
share price in 2023?
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